Yes the overlap at offset checks for an overlapping object at a specific distance. You could use any number within the size of the object to be checked here to find an overlap. Here I'm using it to check if a goomba is seeing another goomba or the ground directly beneath it.
The goombas are 100x100px so that's why the formula has the current position of the goomba +100. On the Y axis, + is down with 0 being at the top of the screen.
Lerp is a way of smoothly interpolating between two numbers at a given rate, so we are asking it to move from the current Y position of the object (self.Y) to a predefined position which is the original Y position of the object+100px on the Y axis (self.Ypos"instance variable"+100px), and we are asking it to do it at a rate of (dt*10). dt is Delta Time which is based on the frame rate. You could also use any number between 0 and 1 instead of using dt to determine the speed.
So the *10 isn't correlated to the offset of 10, it's just the speed that I chose.